Accounting

Impact of Admission of New Partner in the Profit Sharing Ratio of the Firm

Impact of Admission of New Partner in the Profit Sharing Ratio of the Firm

Impact of Admission of New Partner in the Profit Sharing Ratio of the Firm New Profit Sharing Ratio is the ratio at which the partners decide to share profits/losses in the future. A new partner may be admitted when the firm needs additional capital or managerial help. When a new partner is admit.....

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Impact of Admission of New Partner in Value of Goodwill of Firm

Impact of Admission of New Partner in Value of Goodwill of Firm

Impact of Admission of New Partner in the Value of Goodwill of the Firm A reputation built up by a firm has an impact on the present profit and future profit to be earned by the firm. The new partner when admitted, has to compensate for all these sacrifices made by the old ones. At […]

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Re-arrangement of Reserve and Surplus and Accumulated Loss of the Firm

Re-arrangement of Reserve and Surplus and Accumulated Loss of the Firm

Re-arrangement of Reserve and Surplus and Accumulated Loss of the Firm at the Time of Admission of New Partner Reserves are the number of profits, which is set aside until there is a need for money for some purpose. The surplus is where the profits of the company reside. At the time of admission .....

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Adjustment of Life Insurance Policy of Partners

Adjustment of Life Insurance Policy of Partners

Adjustment of Life Insurance Policy of Partners at the Time of Admission of New Partner The partners of a firm may decide to take a Joint Life Policy on the lives of all the partners of the firm. Partners may take out a joint life insurance policy on the lives of all the partners. It enables t.....

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Re-adjustment of Partners’ Capital Giving

Re-adjustment of Partners’ Capital Giving

Re-adjustment of Partners’ Capital Giving due Influence of New Admittance In your partnership, you may decide to add new partners. Sometimes, after the admission of the new partner, all the partners may decide to make their capital proportionate to the new profit sharing ratio or any other .....

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Account Current

Account Current

Account Current It is a statement of transactions in a debit and credit form between a seller and his customer. It is a statement of transactions which represents running transactions between parties. It is periodically prepared and sent by a trader to his debtor or creditor with a view to verif.....

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Account Sales

Account Sales

Account Sales This is a statement supplied by an agent or a consignee who sells goods on behalf of the consignor. It is a report or statement that shows the price at which the goods are sold, expenses incurred by the consignee on behalf of the consignor, consignee’s commission and the net b.....

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Guarantee of Minimum Profit to a New Partner

Guarantee of Minimum Profit to a New Partner

Guarantee of Minimum Profit to a New Partner A guarantee means the surety of a particular amount of profits by one or more partners and in some cases by the firm. Sometimes, as per the agreement, a new partner can be admitted with a minimum guaranteed amount of share in profit while distributing .....

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Ascertainment of Due Amount to Outgoing Partners in Retirement of Partner

Ascertainment of Due Amount to Outgoing Partners in Retirement of Partner

Ascertainment of Due Amount to the Outgoing Partners in terms of Retirement of a Partner The retirement of a partner extinguishes his interest in the Partnership firm and this leads to the dissolution of the firm or reconstitution of the Partnership. Any withdrawals and interest due thereon shoul.....

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Adjustment of Capital in terms of Retirement of a Partner

Adjustment of Capital in terms of Retirement of a Partner

Adjustment of Capital in terms of Retirement of a Partner When a partner retires from the business and if he is to be paid off his due amount immediately, the total capital of the firm is reduced. In case of the death of a partner, the treatment of various items is similar to that at […]Read More »

Adjustment Regarding Goodwill in Retirement of a Partner

Adjustment Regarding Goodwill in Retirement of a Partner

Adjustment Regarding Goodwill in terms of Retirement of a Partner The concept of goodwill can be understood on the basis of its operational significance. The valuation of goodwill has been discussed in the admission of a partner. The retiring or deceased partner is entitled to his/her share of g.....

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Adjustment regarding undistributed Profits and Losses in Retirement of Partner

Adjustment regarding undistributed Profits and Losses in Retirement of Partner

Adjustment regarding undistributed Profits and Losses in terms of Retirement of a Partner Any reserves or accumulated profits/losses appearing on the balance sheet should be transferred to the partner’s capital accounts. At the time of retirement of a partner, there may be some accumulated prof.....

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